Tax Policy

Tax Cooperation Policy Brief 5, December 2018

The Definition and Treatment of Tax Havens in Brazilian Tax  Law between 1995 and 2015

Over the years, a number of ‘tax haven lists’ have been created at the national and international level, with varying definitions and criteria used to identify jurisdictions falling under their scope. This policy brief presents the experience of Brazil in compiling their national list of tax havens, the road map they followed for its implementation, and the impact that it has had on their foreign investment flows. It also provides the lessons learnt from this experience, which can be positively utilized by other developing countries.

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Research Paper 87, November 2018

Stemming ‘Commercial’ Illicit Financial Flows & Developing Country Innovations in the Global Tax Reform Agenda

Illicit Financial Flows generated due to the commercial activities of multinational enterprises are quantitatively the most important challenge faced by developing countries in achieving the Sustainable Development Goals. Current efforts for stemming these illicit flows and reforming the international tax system are however being led by developed countries, with developing country interests poorly reflected in the reform agenda. This research paper highlights the tax issues of great priority for developing countries and how international tax cooperation can contribute to preventing such illicit flows.

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South Centre Quarterly Report, July-September 2018

South Centre Quarterly Report, 1 July to 30 September 2018

This report summarizes the programmatic activities of the South Centre during the period 1 July to 30 September 2018. It is intended to provide information, organized by Program and themes, about recent developments in the areas covered by the South Centre’s Work Program and publications and meetings organized or co-organized by the Centre to examine particular issues or to provide analytical support for international negotiations taking place in various fora. It also informs about external conferences and other meetings where the Centre has participated.

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Tax Cooperation Policy Brief 4, September 2018

Exchange of Information: Indian Experience, Developing Country Implications

Exchange of tax-related information between countries is a critical tool for addressing information asymmetries between governments and taxpayers that facilitate tax evasion/avoidance. However, the existing system of information exchange has been essentially designed and implemented by the OECD, without the participation of developing countries. This policy brief thus discusses India’s experience with implementing information exchange for tax and other purposes, with lessons being drawn for other developing countries grappling with base erosion and profit shifting.

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Tax Cooperation Policy Brief 3, August 2018

Interaction of Transfer Pricing & Profit Attribution: Conceptual and Policy Issues for Developing Countries

Till 2010, model tax conventions treated profit attribution to permanent  establishments  and transfer  pricing under  different  articles,  and  profit  attribution under Article  7  allowed sales to be taken into account both in the direct accounting method as well as the indirect apportionment  method.  However,  the  revised  Article  7  in  the  2010 update of the OECD Convention approximated profit  attribution  with  transfer  pricing  and  omitted  the option  of  apportionment,  thereby  undermining  sales  and contributions   made   by   market   jurisdiction   to   business profits. When a tax treaty retains Article 7 based on the UN Convention  or  the  earlier  OECD  Convention,  Contracting States  can  take  sales  into  account  and  also  opt  for  apportionment.  Developing  countries  need  to  fully  understand these implications of  Article  7 in their tax treaties, and opt for informed choices for transfer pricing and profit attribution  to  permanent  establishments,  including  apportionment that takes sales into account.

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Policy Brief 48, June 2018

Collaboration or Co-optation? A review of the Platform for Collaboration on Tax

The Platform for Collaboration on Tax (PCT), launched in April 2016, is an effort to intensify cooperation on tax issues among the staff of the OECD, IMF, World Bank and the United Nations.  The PCT’s stated objectives include the production of joint outputs, strengthening interactions between standard setting, capacity building and technical assistance and sharing information. PCT has since produced toolkits on issues such as tax incentives, transfer pricing, and taxation of offshore indirect transfers. The PCT also held its first global conference in February 2018 at the UN where a concluding ‘conference statement’, negotiated among the four secretariats, was produced.

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Tax Cooperation Policy Brief 2, May 2018

Transfer Pricing: Concepts and Practices of the ‘Sixth Method’ in Transfer Pricing

Many developing countries are particularly concerned with problems of transfer pricing in the extractive industries, which are often significant components of their economies. Similar to other sectors, profit attribution may be highly dependent on the valuation of commodity exports. For this reason, a number of developing countries have adopted the ‘Sixth Method’, following the Argentine experience. This method aims to establish a clear and easily administered benchmark and avoid the need for subjective judgment and discretion.

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